UAE: Reinsurers reportedly lose $136m in last flood event
Source: Middle East Insurance Review | Sep 2024
Reinsurers lost about AED500m ($136m) on motor insurance alone during the last flood event in the UAE and they now need to recuperate their losses, according to a senior industry executive.
“They are now passing this cost to insurers, who have no choice but to pass it to clients,” Sukoon Insurance executive vice president and head of consumer lines and marketing Julien Audrerie, told the newspaper The National.
He also said the current increases in motor insurance premiums were driven by regular inflation and reinsurance costs after the floods.
“On one hand, the frequency of accidents is increasing, with more cars on the road. Spare parts are more expensive and large claims above AED100,000 more frequent, with the general increase in the prices of cars,” he said.
“On the other hand, the reinsurance cost to limit the impact of natural calamities on insurers has rocketed for the entire market.”
Mr Audrerie said, “But to put things into perspective, clients are still paying less than the pre-COVID prices of 2019. Paying less than five years ago despite the inflation is quite a bargain.” M